The Best Time to Save Money on Equipment
Is it really the most wonderful time of the year? Well, reasonable people can disagree on that. But for RCI and others in our line of work, it often is at least one of the busiest.
Why is year end so busy?
We haven’t done a formal study or even really surveyed our customers but there are a few reasons we’re aware of that people tend to call us in to to big jobs in November and December.
Number 1: Business is slow.
This may sound counter-intuitive. If business is slow, why is business up?Also, isn’t this the best time for year for retail? There are a couple reasons.
I’ll start with the last point. Yes, business to consumer retail does tend to be busy this time of year as well – it’s the gift-giving season. But that’s the rare animal. A lost of businesses are winding down right now. People are taking off. There are sometimes weeks at a time when a whole office building is closed.
The reason that matters to us is that it’s a good time for companies to add something to their infrastructure. There is the least disruption to business when business is slow. So if someone has been waiting to change out something major like a phone system or computer network, year end can be an excellent time for it.
Number 2: Budget surpluses need to be spent.
Sometime departments have money left over at the end of the year. In some companies, if they don’t spend it, they get less money allocated next year.
Number 3: Taxes
At the end of the year, when accountants are going over what you made and what you spent, sometimes, often really, we’re looking for a way to reduce tax liability. Making a necessary purchase for your business can do just that. And you can get a little help from the 4th reason…
Number 4: Section 179
Section 179 is probably the least well known of the reasons. In most cases businesses depreciate the value of their equipment over time. Section 179 allows you do deduct the cost of qualifying software and equipment all at once at the time of purchase.
One interesting side note about section 179 – you can use it even if you’re leasing the equipment. In other words, you get the benefit of the product and the benefit of the deduction up front. But you pay for in easy installments. It’s a powerful financial motivator.
Technically, 179 isn’t specifically related to the end of the year but as the fiscal year ends, many companies start thinking about where to get that extra deduction.
If you’re looking to make this the most wonderful time of the year for your company or organization, give RCI a call.
